Installing a smoothie or coffee bar in your studio may seem like a dependable way to add revenue to your business. But it’s not a decision to make without plenty of research into the expense and effort to build out, and how that will ultimately affect your bottom line. We talked to two Toronto studio owners about their experiences and whether they would do it all again.
The King of All Amenities
While your studio, the trainers and the classes help sell memberships, nothing seals the deal quite like upscale amenities. And one of the best perks of all is having an on-site smoothie, juice or coffee bar, where members can pick up a healthy beverage after class, making your gym the ultimate one-stop-shop.
“I honestly think every gym needs a juice bar,” says Larry Track, owner of Track Fitness in Toronto. “Otherwise, your clients will go elsewhere.”
Adds Anthony Clarke, owner of Juiced Bar at Hard Candy Fitness in Toronto, “An important benefit is the creation of a place to hang out, an after-workout destination where people can be social. We believe this is an essential part of our club—to build a healthy and strong community of people who love to sweat and have fun.”
If you’re considering adding refreshments to your studio, think about whether there is a market for this among your clients.
If you’re considering adding refreshments to your studio, think about whether there is a market for this among your clients. Are you located in a metro area that’s otherwise densely populated with smoothie bars, juice bars, or coffee shops? Your customers may be more familiar with those brands and have purchasing habits in place at those other venues. That being said, if you can replicate the quality and service that a larger franchise provides with an efficient prep method after class, you can definitely stand out amongst that competition and potentially convert those clients.
While the on-site bar may be a worthwhile addition to your studio, be wary that it comes at a cost. When Track first opened his gym in 2005, it was a 1,000-square-foot studio, and he was making clients shakes and smoothies out of a bullet-like blender with little to no overhead costs. Fast-forward eight years, and he moved into a 10,000-square-foot venue, where he dedicated 700 square feet to his juice and shake bar, dubbed “Larry’s Kitchen.”
How much does it cost to build out such a space? “You’re looking at a minimum of $50,000,” Track told us. “A good fridge is $5,000-$7,000, and then you need freezers. I did it on a shoestring budget in the beginning, but when you want to have a full-fledged bar, and do it nice, the counters and refrigerators and plumbing costs alone will get you to $50,000.”
And then there’s the upkeep. Stocking fresh juices is a pricey business, especially when you consider their expiration date. “Making protein shakes is a great revenue,” said Track. “But when it comes to juices and food, the margins are pretty small. And then you have the waste. Even though we were making a great profit on shakes, we were losing so much money due to expired food and juices.”
According to an article published by Entrepreneur, smoothie shop owner Cari West of Blaz’n Blenders claimed 50% of her expenses went to food costs alone. She attributes these expenses to the high quality produce and ingredients she uses, and says, “I may use expensive ingredients, but my stores are in locations where I can afford it. My location and my product are the two most important parts of my business.” As a studio or gym owner, the benefits of health-conscious clients at your fingertips are huge, though it’s important to consider that if juice and smoothie manufacturing aren’t your main focus, it can be tough to truly turn a profit.
The Daily Grind
Another cost to consider: staffing. When Hard Candy opened its doors in 2013, group fitness director Lori Kirwan had a full-time salaried staffer on-hand making smoothies everyday. “We found that the juice bar profits weren’t even paying for the salary,” said Kirwin. She and her team ultimately let the staffer go and instead sold the bar to Clarke, who now pays Hard Candy a monthly lease for Juiced Bar. “He’s running it as his own business, any profit he makes beyond the rent he owes us is his own,” Kirwan explained.
According to Clarke, his monthly expenses are currently $2,000 a month, a number that includes rent, staffing and produce (but not marketing). While he says he’s making a profit, he also admits he’s not paying himself, despite the long hours he puts in everyday.
“The thing to understand is that how the bar does revenue-wise depends completely on your membership—people aren’t coming in off the street to buy juice inside the gym,” Clarke explained. “So the juice bar will only do as well as the club itself, and will go through the ups and downs along with membership.”
A Secondary Business
After managing Larry’s Kitchen for a year and a half, Track opted to lease out the space to Greenhouse Juice, a hot local chain that pays Track a portion of the bar profits, in addition to rent every month. “They’re doing great, but that’s what they do, it’s what they specialize in,” said Track. “You really need to have a lot of knowledge and focus and training, and Greenhouse does. And they knew our traffic flow. It’s a perfect fit.”
If you have the capital to back it up, it’s worth considering the franchise route of installing a well-known brand in-house, similar to how Equinox has a Juice Generation location at their East 63rd St. gym in Manhattan. Kirwan adds, “Like any business, the juice bar takes full-on passion and commitment to make it work. For us it made the most sense to outsource it to an expert.”
When it comes to bottom line, unless you are in a financial position with plenty of cash, space, and staff to back it up, an in-house smoothie, juice or coffee bar is probably not the best investment. In the meantime, focus on delivering what you do best: an amazing workout and client experience.